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Changes to the procurement of gas and electricity in communal buildings - Update

Following a hearing held on Monday 30 April, The Property Chamber, Manchester Residential Property, First-tier Tribunal (formerly the LVT), has made its determination in respect of our application to dispense with our requirement to consult with residents for the purchase of gas and electricity supplies for communal areas (your personal energy contract is not affected). The tribunal has determined that we do not need to consult with residents for this purchase.

How does this affect me?

As a tenant or leaseholder, you will have been sent a copy of the decision letter from the Courts and Tribunals Service. The Regenda Group, on behalf of all of our member landlords provide electricity and gas to communal areas across many of our developments. We recover this cost from you through your service charge.

Our current contract for the supply of gas and electricity is due to end and so we need to make sure that we have secured the best price.

Why is it so difficult for you to consult?

At the point where we think we have an excellent value price, we need to lock in that price almost immediately. The section 20 consultation process means that we have to give you 30 days to provide feedback on the pricing structure we have received from our suppliers. This means that we cannot lock in the best price as and when we see it. We can’t do this as we have to wait 30 days, at which point, the price will have changed.

We want to be sure that we get the best price as we ultimately recover these costs from you.

Why is the energy market so difficult?

In short, the energy markets are particularly changeable. The pricing we can secure depends on a variety of factors. Some of these factors are as basic as the weather (when it is cold, energy costs more) or they can be affected major world events (political change is one example). Currently the price of energy is higher than what you are used to paying.

We purchase energy from wholesale providers meaning we buy in bulk and get a better rate. After looking at the energy market and understanding trends, we believe that the wholesale market is slowly starting to become cheaper. Largely we put this down to the time of year as the weather is starting to improve.

Will you consult on other purchases you make?

Absolutely, as a business we value transparency and we want to consult with you as much as possible before securing contracts on your behalf. This particular project is just very tricky and requires quick decision making.

What other benefits will we see?

One of the things we are really keen to see is the introduction of smart meters. We have agreed with a broker that they will support us, at no charge, to achieve this. This will ultimately lead to much more accurate billing across all of our portfolio. It may take some time but we see this as a crucial step to making sure you get value for money.

We have also made use of a bill validation service, offered by our broker, again at no charge to you as a customer. This means that the broker will review bills and look for spikes in how much energy we use and help us to understand the reasons for this.

We will be asking any potential supplier to help us with becoming greener and reduce our usage across all of our properties too.

Clearly, this is a starting point for helping us to ensure you pay as little as possible for the supply of energy and we encourage your feedback at any time.